FLEXIBLE BENEFITS
Flexible benefit schemes help cut benefits costs
Nearly one in four employers have reduced their benefit costs by introducing a flexible benefits scheme, according to a survey of UK employers by Mercer.
A total of 55% of respondents believed that setting up a flexible benefits scheme would actually increase their costs. Yet 39% of those with flex schemes said their benefit costs were lower than they would have been without a flex scheme, while 45% said their costs had been unaffected.
%ADVERT%
“When put into practice, flex can be an effective vehicle for managing and reducing company costs. This is done by putting a limit on employer contributions to employees’ benefit packages. As costs increase, employees can elect to reduce their benefit levels, increase their own contributions or switch to another benefit,” said John Puddephatt, senior consultant at Mercer. “Employers can also make benefit adjustments that help to reduce tax and national insurance contributions. Examples are salary-sacrifice programmes for pensions and other benefits.”
Why introduce flex?
Only 11% of respondents to Mercer’s survey said that the most important reason for introducing flexible benefits was to reduce or control the company’s contribution to benefit costs.
Puddephatt said: “From this research, and evidence from our own client work, we believe flex should be given higher priority as an option for managing company costs – given most companies are looking to make further cost reductions in the year ahead. In the survey, a total of 33% of employers said that they aimed to reduce their current benefit spend in 2010, while 45% said they planned to reduce benefit cost increases over time.
Want to know more?
The survey was based on 135 responses from employers in the UK, and was part of a wider initiative to survey employers about flexible benefits globally.
Availability: To view and buy Mercer surveys, visit http://uk.mercer.com/surveys.
Mercer is a “leading global provider of consulting, outsourcing and investment services”. It works with clients to solve their most complex benefit and human capital issues, designing and helping manage health, retirement and other benefits. Mercer’s 18,000 employees are based in more than 40 countries. For more information, visit www.mercer.com.